Mel Turner, my friend, fellow Marine and Conference team member, will be handling the duties of moderating the Question & Answer sessions with a number of authors and experts at our upcoming 2018 Bogleheads Conference which takes place October 3-5.

We’re accepting questions for the Experts Panel members from you (and yes, you may ask more than one question). This is your opportunity to ask any question (or questions) about something you’ve always wished you could ask.

Your question(s) may be directed to the entire Experts Panel or to an individual member of the Panel. If you want to direct a question to an individual member, simply start your question with “A question for …..” and fill in the name of the Expert Panel member you’d like to address your particular question to. Otherwise, your question(s) will be directed to the entire Panel.

This is Mel Turner (aka TOM, The Other Mel). Just like the two previous years I have the privilege of asking the experts questions at the 2018 Bogleheads Conference. I'll do my best to ask questions that cover the spectrum from the novice through the sophisticated investor. So spare "the experts" no mercy and post any question that you would like addressed. I'll gather them, sort them out and use only the "best-of-the-best."

For those lucky enough to attend this year, I'll see you there.

TOM

"I can calculate the motions of the heavenly bodies, but not the madness of people." Sir Isaac Newton

I’ve read many threads about different types of safe withdrawal rates on the forum. At this point my head is spinning from too much information! What type of safe withdrawal rate do you (or will you) use with your own money and why?

1. You advocate for a small allocation to precious metal stocks for those who could stomach a very long time of portfolio drag. Since we saw that during the last PM bull market 2000-2011, the metals themselves greatly outperformed an indices of PM stocks due to poor management / late to the party with reversing their hedges / the nature of PM stocks to be bid up as lottery ticket stocks, have you changed your stance at all to owning the actual metal (physical/ETF) instead of these, rather junky stocks.

Investors making contributions to a personal (taxable) account, especially those with long time horizons such as those very early in their career may be investing for 60-70 years. They must consider an ever-changing landscape in the financial industry with misaligned management incentives and shifting sources of revenue as regulatory regimes change, while the investors' tax "lock-in cost" only increases as time passes. As a concrete example: Vanguard has well-aligned incentives while Blackrock may not despite running excellent funds (e.g. the ultra low cost iShares Core funds were introduced with lower expenses while those investors in identical iShares funds received no fee cut -- famously, the MSCI Emerging Markets ETFs: IEMG vs EEM -- a 0.55% ER difference for funds tracking the same index). The potential for fee increases also looms. How would you advise someone in such a position to evaluate fund selection with this in mind, even for broad-based total market index funds?

"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

What is one piece of advice that you've given in the past that you no longer agree with? Why did you change your mind? To narrow the question a bit, please focus on Boglehead-ish advice as opposed to advice you might have given when you worked for a 2-and-20 hedge fund back in the day or when you were writing a market-timing newsletter.

When helping people plan for retirement do you use the funded ratio to monitor their progress toward reaching their retirement income goal? Please talk about your reasons for using or not using the funded ratio in your work.

Thanks,
BobK

In finance risk is defined as uncertainty that is consequential (nontrivial). |
The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

I continue to gather your excellent questions and want to thank all of those who have submitted questions so far. Feel free to address your question to an individual or to the entire group. We all look forward to a memorable conference.

TOM

"I can calculate the motions of the heavenly bodies, but not the madness of people." Sir Isaac Newton

Hi and thanks for asking.
As a teacher of Personal Finance, I have always taught my students that long term financial gain will occur via stock bonds mix. I use the rolling 30 year backtesting to portray the value on investing long term. The students' eyes widen.

However, given algorithmic trading, market insecurity, the internet, geopolitics, etc. are we now in a new set of market structures that invalidate history?

We just received some exciting news for the Bogleheads Conference on October 3/4/5.

Rick Ferri will be attending the conference and be sitting on the expert panel so you have one more expert to help answer your financial questions.

Bogleheads:

In June, 2002, at a Morningstar Convention in Chicago, Rick Ferri came up to me and said he would like to be added to their panel of experts (3). I knew Rick well and that he probably knew more than anyone on the Morningstar Panel. I asked the panel moderator if Rick could join his experts. He said "no."

I went to the back of the room where Rick was seated and relayed the negative reply. Instead of being offended, Rick said, "Don't worry, I'd rather listen."

Very few people have the desire to help others and know as much about investing as Rick Ferri, author of 9 books on investing including co-author of The Bogleheads Guide to Retirement Planning.

In my opinion, with the addition of Rick Ferri to our Boglehead panel, you will never find a better "Panel of Experts."

When I visit other investment sites for example Seeking Alpha their seems
to be a huge population of dividend investors both in individual stocks &
dividend paying index funds (hundreds if not thousands of investors).

I would like to request the panel discuss dividends & the dividend
strategy. Using Vanguard funds I' am interested in the
High Dividend Yield Index Fund & Dividend Appreciation Index Fund.

Let's say tax-deferred space is filled with taxable bond funds, but is short of the desired bond allocation. Do you suggest a maximum % of the bond allocation or total portfolio allocation to muni bond funds for a high tax bracket investor?

My questions are about asset allocation and they're for the entire panel:

1) Larry Swedroe seems to recommend a very strong tilt toward small cap value, with perhaps as much as 100% of the equity allocation being in the form of small cap value. What does the panel think about that? How much tilt do you think is acceptable, and how much is clearly too much?

2) Last year Jonathan Clements suggested that, due to demographics, emerging markets have more potential for growth in the next half century. The argument was that earnings growth are determined by population growth plus increases in productivity, and the future population growth in the United States will be much lower than it has been in the past. I would like the panel's views on this (including Mr. Clements).

Hi and thanks for asking.
As a teacher of Personal Finance, I have always taught my students that long term financial gain will occur via stock bonds mix. I use the rolling 30 year backtesting to portray the value on investing long term. The students' eyes widen.

However, given algorithmic trading, market insecurity, the internet, geopolitics, etc. are we now in a new set of market structures that invalidate history?

All the panel: There have been four major "drawdowns" in stocks since I started investing in 1970 (73-74, '87, 2001, 2008 etc). Mandelbrot in his book "The Misbehavior of Markets" warned that stocks are far more risky than modern portfolio theory suggests. The number of drawdowns and the percentages suggest that Mandelbrot and Nassim Taleb may have a valid point that Gaussian bell curves give false security about the riskiness of stocks. Your reactions and suggestions for how 1) those in retirement should allocate; and 2) the same for a young investor.

How can an investment strategy using a SP500 index fund ( VINIX) still be valid with only ten companies (FAANGS) dominating index earnings?

No longer is risk of loss spread amongst 500 companies, changes in a few tech companies significantly affects the index.
Thus a key benefit of a stock index fund is greatly diminished.

Reference:https://www.bloomberg.com/news/articles ... half-gains
"David Kostin, chief U.S. equity strategist at Goldman Sachs, highlighted that more than 100 percent of the S&P 500’s total return of nearly 3 percent in the first half is attributable to just 10 equities. Amazon.com Inc. alone accounts for roughly two-fifths of the benchmark gauge’s advance"

Is there any problem or difficulty you can see if an investor ends up at retirement with a large Roth IRA and no Traditional IRA with mixed pro rata and no pre-tax 401k?

In other words, if a millennial today rolls his 401k over into a Rollover IRA and then converts it all to a Roth IRA, and continues to do so throughout his working life, will there be any problems with this strategy come retirement time?

For all those attending the Bogleheads Conference on 3/4/5 October we just received exciting news. Jason Zweig has agreed to attend and will be sitting on the "Panel of Experts" to respond to submitted questions. I'm sure he, along with the other authors, will be willing to sign any books your bring along.

All else equal, should one diversify the institutions where his or her assets reside? Assuming one already has an account (or accounts) at Vanguard, which other institution(s) should one consider and why?

My first post as a BH, so I hope this doesn't sound too silly.
What scenarios could unfold in the market in the next 40 years that would demonstrate BH principles unsound? Where are the chinks in the armor? What do staying-the-course BH's worry about?

My first post as a BH, so I hope this doesn't sound too silly.
What scenarios could unfold in the market in the next 40 years that would demonstrate BH principles unsound? Where are the chinks in the armor? What do staying-the-course BH's worry about?

Vanguard has clearly experienced tremendous growth in assets in the recent past. Posters have relayed problems, quite significant, at times, that they have encountered with fund companies, including Vanguard. What can personal investors watch for proactively to make sure their fund companies are well-managed and will continue to be worthy stewards of their hard-earned capital?

I would like to know the panel feels about Global Bonds.
A) Should they be part of a person's portfolio (Why or why not)?
B) What percent of a person's overall bond portfolio would they recommend being in Global Bonds?
C) How do they feel Global Bonds would with rising interest rates and in a possible recession?

Thank you

"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Mr.BB - Thanks for the questions. I know that Global Bonds will be part of the discussion during the conference.

FiveK - Thanks for taking the time to present the question about 401(k) contribution limits. My understanding is that IRS regulations set the contribution limit and restrictions. The reason for a certain percentage might be one of those regulation mysteries. Thanks again for the questions.

For All - We are coming to an end of the time to submit questions for our expert panel at the Boglehead Conference. There have been some excellent questions that I am sure will be asked. On Sunday, September 16th, we plan on shutting this tread down. Thanks to all. For those attending the conference, we look forward to seeing you on October 3.

TOM

"I can calculate the motions of the heavenly bodies, but not the madness of people." Sir Isaac Newton

FiveK - Thanks for taking the time to present the question about 401(k) contribution limits. My understanding is that IRS regulations set the contribution limit and restrictions.

Yes, there is an IRS limit on contribution amount, but that is not the question.

The reason for a certain percentage might be one of those regulation mysteries.

There should be no mystery, and I believe there is no good reason for an employer-imposed percentage limit, particularly on non-HCEs. Of course, that's just my belief and thus the question to the Experts Panel.